PH financial system seen intact amid Hanjin default
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Tue, 15 Jan 2019 03:45:24 +0000
THE Philippine financial system is unlikely to be shaken by the loan default of a bankrupt Korean-owned shipbuilder, a Fitch Group unit said, but warned of challenges moving forward due to slower economic growth.
“Our view at Fitch Solutions is that the loan default by the local shipbuilding unit of Korean conglomerate Hanjin, the biggest in the Philippines’ banking history, is not a systemic problem and is unlikely to threaten financial stability in the country in the near-term,” Fitch Solutions said in a report released on Tuesday.
Subic-based Hanjin Heavy Industries and Construction Philippines (HHIC-Phil) which last Tuesday filed for corporate rehabilitation, reportedly owes Land Bank of the Philippines (Landbank), BDO Unibank, Inc., Rizal Commercial Banking Corp. (RCBC), Metropolitan Bank & Trust Co. (Metrobank) and Bank of the Philippine Islands (BPI) around $412 million in addition to another $900 million to South Korean creditors.
Fitch Solutions believes that Philippine banks as a whole have strong capital buffers and low non-performing loans on their balance sheets.
“Nevertheless, we maintain our expectation for credit growth to slow and asset quality to weaken over the coming quarters, as the operating environment becomes more challenging due to slowing economic growth momentum and tightening monetary conditions,” it said.
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